4% DA hike for Central staff

New Delhi: The Union Cabinet on Wednesday approved 4% hike in dearness allowance (DA) for Central government employees and dearness relief (DR) to pensioners, ahead of the upcoming festival season in the country. With this, DA for such employees now stands at 38% of the basic pay/pension as against 34% earlier. The hike will be applicable with effect from July 1, 2022. The additional financial implications on account of the increase of DA to employees are estimated at Rs 6,591.36 crore per annum, and Rs 4,394.24 crore in the financial year 2022-23 (8 months from July 2022 to February 2023).

In case of pensioners, the additional financial implications are estimated at Rs 6,261.20 crore per annum, and Rs 4,174.12 crore in the financial year 2022-23. The combined impact on the exchequer on account of both dearness allowance and dearness relief would be of the order of Rs 12,852.56 crore per annum and Rs 8,568.36 crore in the current financial year, I&B minister Anurag Thakur said while briefing about Union Cabinet decisions.

This is the 4th hike in DA allowance since rate hike was stopped in 2020 in wake of Covid-19. DA and DR rates were hiked from 17% to 28% after almost a year-long gap due to Covid-19 in July 2021. Rates were again hiked in October last year when the Centre had increased DA from 28% to 31%.

In March this year, the Centre had increased DA by 3% from 31% to 34%, effective January 1, 2022. In wake of the pandemic, the Centre had frozen three additional instalments of the DA and DR which were due from January 1, 2020, July 1, 2020 and January 1, 2021.